THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[18:00:23]

BRIANNA KEILAR, CNN ANCHOR: Happening now, breaking news: high-speed intercept. Iranian military ships comes dangerously close to a U.S. warship. We have video of the incident and incredible new details.

Campus attack, students trapped and fires burning after gunfire and an explosion tear through the American University in Afghanistan. U.S. military personnel responding to a deadly and uncertain situation.

Uncharitable. Donald Trump escalates his bashing of the Clinton Foundation, as Hillary Clinton campaign's defends the organization's good works and argues that Trump is seizing on an utterly flawed report.

And unforgivable. Japan and the United States condemn North Korea for firing a submarine-launched missile. The test revealing that Kim Jong-un may be closer than ever to making good on his threat to attack American targets.

We want to welcome our viewers in the United States and around the world. Wolf Blitzer is off today. I'm Brianna Keilar. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

KEILAR: We're following breaking news.

Officials believe terrorists are still on campus and at large in the attack and siege at the American University in Afghanistan. The gunmen opening fire and detonating explosives, forcing students and faculty to run for their lives.

One witness telling CNN some students were trapped. At least one person is dead and 21 injured.

Also breaking, the death toll from the powerful earthquake in Italy is now up to 132 and it's expected to keep climbing, as crews search through the rubble, with aftershocks still posing a threat. Communities at the epicenter of the quake are devastated and one mayor says his town is no more.

Here in the United States, Donald Trump is accusing Hillary Clinton of actions that are criminal and totally calculated. Speaking in Florida, Trump is ramping up his attacks, particularly on the Clinton Foundation. Republicans are seizing on a report claiming that more than half of the people outside of the U.S. government who spoke or met with Clinton as secretary were donors to the foundation.

The Clinton campaign is firing back. They say the report relies on utterly flawed data and her allies are denying allegations of pay-to- play politics, emphasizing the foundation's charitable work that saves lives.

Republican Congressmen and Donald Trump supporter Duncan Hunter is standing by with us, along with our correspondents and analysts, as we bring you the full coverage of the day's top stories.

First, another breaking story that we are following, though. Iranian warships coming within a few hundred yards of a U.S. Navy ship. This is unbelievable, these pictures we're getting in.

If you take a look at this video right here, you see four Iranian vessels coming dangerously close to the Nitze. We understand from the U.S. military that the guided destroyer tried to -- on 12 separate occasions tried to reach out to these Iranian vessels -- 12 -- tried to reach out to these Iranian vessels to tell them to stop, but here they are just speeding so close to the Nitze.

We understand just 300 yards. That's a dangerously close call, Brianna. You can see they're coming through with like real warp speed despite these warnings from the Nitze that they are in the area and they should stand down.

KEILAR: Communications. Flares. You see multiple times they're shooting off flares.

LABOTT: That's right.

KEILAR: It's pretty obvious to the Iranian boats there what's going on and that it's not OK with the warship there.

I do want to ask you though about the American University in Afghanistan, because I know that you have been following this. This is ongoing. We had heard reports that there was gunfire, there were explosions. There are still possibly students and even faculty, some of whom may be American, holed up inside as we still don't know what is responsible.

LABOTT: We understand that the Afghan national forces are still on the scene. They are trying to clear the area. We understand there could still be explosives there. There are people trapped inside, students, faculty. The U.S. Embassy

tells us all their personnel are accounted for, but U.S. personnel doesn't work in this university, but American teachers do. And so what the embassy is trying to do is comb through lists. Who has gotten out? Many people have been rescued, but still many inside.

Trying to see if there's Americans inside. There are some -- a few U.S. military advisers on the scene working with the Afghan national forces, but only in an advisory committee. The Afghans really have the lead here.

[18:05:00]

KEILAR: All right, Elise Labott following two breaking stories for us, thank you so much.

Now to the earthquake devastation in Italy. We are told that rescue efforts are continuing through the night.

UNIDENTIFIED FEMALE: Absolutely appalling noise, clinking, thundering sort of rumble. It sounded like someone had put a bulldozer under the house to try to knock it down.

PLEITGEN: Rescue workers and residents using everything, from their bare hands to farm equipment, to pull people from the rumble.

The strong and shallow quake Amatrice in ruins and caused many of the ancient buildings to crumble. Amatrice's mayor, Sergio Pirozzi, telling Rai News -- quote -- "The town is no more."

UNIDENTIFIED MALE (through translator): The important thing is to stay calm. Police officers are on their way now.

PLEITGEN: These frantic scenes playing out repeatedly before time runs out.

UNIDENTIFIED MALE: They found two person alive under a building that collapsed. So this is our first priority.

PLEITGEN: Just a short while ago, CNN correspondent Barbie Nadeau was nearing the end of a Facebook Live Wednesday afternoon in Saletta, Italy, when the building collapsed directly behind her. No one is allowed to sleep in the town of Amatrice tonight, Italy's civil protection agency said.

UNIDENTIFIED FEMALE (through translator): By sheer luck, I have no idea how I survived, just like many others. But many others did not.

More than 1,000 people have been displaced because of the quake.

John Carlos (ph) was in a house on top of a hill that collapsed.

UNIDENTIFIED MALE (through translator): I can't go around without clothes. They gave me these shoes, so at least I'm not barefoot, but obviously we can't move around here. I heard people asking for help, people calling out, asking for help. But in this condition, what could I do?

PLEITGEN: Lazio's regional government is asking for blood donations. And the local Red Cross has asked residents to open their Wi-Fi networks to improve rescue communications.

Italy's prime minister vowing to spare no effort in the critical window where lives could still be saved.

MATTEO RENZI, ITALIAN PRIME MINISTER (through translator): It is a time when we're in shock, but it is a moment for action. With my heart and my hands, I would like to say to Italians during difficult moments Italy knows how to react and what to do.

PLEITGEN: And Pope Francis tweeting in Italian expressing great sorrow for the people affected by the earthquake. He sent a team of six firemen from the Vatican Fire Department to aid in the search-and- rescue effort.

(END VIDEOTAPE)

KEILAR: That's our Fred Pleitgen reporting from Italy.

And we also have breaking news tonight in the presidential race. New CNN polling shows Donald Trump and Hillary Clinton are neck and neck in the battleground state of North Carolina. And Donald Trump has a five-point edge in Arizona. That's a state that traditionally leans Republican.

These new snapshots coming as the Clinton campaign is trying to deflect sharp new attacks.

Those sharp new attacks really revolve around the Clinton Foundation and allegations that special access was given to the secretary of state for those who contributed money to the foundation.

The Clinton campaign calls this report from the Associated Press grossly unfair and inaccurate.

Just a few moments ago, former President Bill Clinton weighed in on this for the first time, talking about the humanitarian work the foundation has done around the globe. But he did acknowledge the foundation "will have to do more" if she's elected president.

PLEITGEN: Clinton is raising millions on star-studded California swing, off the campaign trail for a third straight day, this time with Apple CEO Tim Cook.

Trump is having a field day with an Associated Press report reviewing Clinton's calendar during part of her time at the State Department. It found more than half of her non-government visitors gave money to the Clinton charitable foundation.

Clinton aides say those figures are just not true. She's not commented, but her team is mounting a full-throated defense of the foundation's work.

ROBBY MOOK, HILLARY CLINTON CAMPAIGN MANAGER: Hillary Clinton and her family had a foundation. It's charitable.

BRIAN FALLON, CLINTON CAMPAIGN SPOKESMAN: Charitable organizations that are doing important work, and the idea that they would be dragged into a political back and forth used as weapons for attacks is completely absurd and beyond the pale.

JOEL BENENSON, HILLARY CLINTON CAMPAIGN ADVISER: I think it's one of the most massive misrepresentations you could see from the data. And then they're trying to malign and implicate that there was something nefarious going on, when in fact there wasn't.

PLEITGEN: Chief strategist Joel Benenson telling CNN's Chris Cuomo that Trump's suggestions of pay-for-play are false, noting that Trump also gave money to the foundation, known for its humanitarian work around the globe.

BENENSON: Donald Trump gave $100,000 to the foundation. It's a big donation. Was he paying for play?

[18:10:11]

ZELENY: It's hardly the quiet August Clinton was hoping for.

A new CNN/ORC poll shows Clinton and Trump are neck and neck in North Carolina, a once Republican state emerging as a top battleground. Trump is leading in Arizona, long a GOP stronghold, but only by five points, raising the prospect Clinton could expand the map. But those efforts may be undercut by a new round of critical headlines over the foundation and her private e-mail server.

Friends of Clinton tell CNN the campaign was taken off guard, believing the foundation controversy was behind them. The campaign has reacted slowly, these Democrats say, because Bill and Hillary Clinton have long believed the good works of the foundation outweigh any appearances of conflict.

Clinton is hoping to turn the page in a speech Thursday, blasting Trump far beyond questioning his temperament. Aides say she will highlight a disturbing connection between Trump and the alt-right conservative movement, often associated with white nationalism.

NARRATOR: Trump's products have been made in 12 other countries.

ZELENY: She is also highlighting his outsourcing in a new campaign ad.

NARRATOR: Donald Trump says he will make America great again, while he's taking the shirts right off our backs.

ZELENY: All this as the Pentagon confirms an Army unit in Missouri used Clinton's picture in a slide show of people who have threatened national security, like Edward Snowden indicted in the WikiLeaks case and David Petraeus who pleaded guilty to sharing classified documents.

The Army says the slide show has been taken down.

(END VIDEOTAPE)

ZELENY: Now, back to that Associated Press report which Donald Trump has seized on what he calls pay for play. Actually, the report found no evidence of any unethical behavior. Many of the people she met with were leaders of groups who often meet with Republicans and Democrats.

But it did show blurred lines. It's creating headwinds for a campaign that had been on a roll since the Democratic Convention last month. She's trying to move forward, giving that speech in Nevada tomorrow. And we have learned she will receive her first classified intelligence briefing as a presidential candidate Saturday in New York -- Brianna.

KEILAR: All right, Jeff Zeleny, thank you so much.

We're standing by for a Donald Trump rally in Mississippi tonight as he unleashes new attacks on his opponent and continues to reboot his campaign.

CNN political reporter Sara Murray, where Trump had an event earlier today.

Hi, Sara.

SARA MURRAY, CNN NATIONAL POLITICAL CORRESPONDENT: Hi, Brianna.

Earlier today, Donald Trump did try out some new zingers against Hillary Clinton continuing to go after her, essentially saying she just used the State Department and the Clinton Foundation to grant political favors to some of her donors.

He also tried out a couple new lines designed to go after Hillary Clinton and help him win a larger share of the minority vote.

(BEGIN VIDEOTAPE)

MURRAY (voice-over): Donald Trump is keeping up the drumbeat of criticism against Hillary Clinton, accusing her of using the State Department and her family foundation as political piggy banks.

TRUMP: Hillary Clinton ran the State Department like a failed leader in a Third World country. She sold favors and access in exchange for cash.

MURRAY: Campaigning in the pivotal battleground state of Florida today.

TRUMP: As you know, Florida is my second home.

MURRAY: Trump now tailoring his Clinton criticism to help win over more African-American and Latino voters.

TRUMP: Hillary Clinton would rather give a job to an illegal immigrant than to an unemployed Hispanic citizen, an unemployed African-American citizen or even to a veteran.

MURRAY: Part of the campaign's pledge to improve outreach to minorities and push back against the perception by some that Trump is racist.

TRUMP: African-Americans are tired of being used by these phony politicians.

MURRAY: But even Ben Carson, one of Trump's most ardent supporters, tells Brianna it's a tough sell.

DR. BEN CARSON, CONSERVATIVE ACTIVIST: He fully recognizes that he's probably not going to get the majority, anywhere near the majority of the African-American votes because of tradition.

MURRAY: Trump's pitch to minorities come as speculation swirls about whether he will tweak his immigration policy. For now, he's at least tweaking his tone, saying he's open to a softer approach for undocumented immigrants without criminal records.

TRUMP: There certainly can be a softening because we're not looking to hurt people.

MURRAY: Amid all of this, both candidates are still fielding questions about the sparse information they have provided on the state of their health. Today, Carson is calling on both to be more transparent.

CARSON: This is a 24/7 job. And you're going to have to have a lot of stamina and the ability to process a lot of information quickly. And we want to make sure that both candidates meet those qualifications.

MURRAY: While Trump surrogate Rudy Giuliani continues to question Clinton's health, based on a gesture of surprise during an interview and a bathroom break during a debate. (on camera): You don't see any problem with questioning the possibility of the Democratic nominee's health based on no facts?

[18:15:02]

RUDY GIULIANI (R), FORMER MAYOR OF NEW YORK: What do you mean based on no facts? There were rather bizarre things that happened, like that time that her head started shaking in the middle of an interview and the time that she got off the stage for some period of time during a debate. That isn't based on no facts. Do those facts mean that she's seriously ill? I don't know.

(END VIDEOTAPE)

MURRAY: Even though Giuliani himself admitted that those instances are hardly proof there's something wrong with Hillary Clinton, he is still calling for her to release more complete medical records. He says if she does that, Donald Trump will do the same -- Brianna.

KEILAR: Sara Murray for us in Tampa, thank you.

We're joined now by Congressman Duncan Hunter of California. He's a Donald Trump supporter. He's also a member of the Armed Services Committee.

Sir, thanks so much for giving us your time today.

And I want to talk politics with you. But, first, I want to talk to you about what we're seeing certainly going on in Iran. You're a member of the House Armed Services Committee. And we have just seen this video. It's really pretty unbelievable when you look at it.

These are Iranian vessels coming within 300 yards of a U.S. destroyer, despite the fact that the U.S. destroyer is making it pretty clear this is an unwelcome advance with flares, with 12 times trying to communicate on radio that they should desist. What do you know about this?

REP. DUNCAN HUNTER (R), CALIFORNIA: Sure.

And not too long ago, the Iranians arrested our sailors and held them, right? This isn't the first time, obviously. We know that Iran is the biggest state sponsor of terrorism in the world. They're just messing with us.

And this is what I would do. If I were America's enemy and I wanted to test what America would do and how would we react, this is how I would do it. They are simply probing, messing with us and frankly showing that they can kind of do what they want and there's not going to be any retaliation from the Americans.

KEILAR: OK.

And now to politics, because we heard that Donald Trump, this was his words, that he could be softening his position on immigration. He was to give a speech tomorrow. That's been pushed off indefinitely. What is he talking about here? Does this include a softening on the deportation force? Does this include a softening on his desire to build a wall on the southern border?

HUNTER: I'm coming at you right now from San Diego, California.

I'm down here on the Mexican border. He's talking about deporting people. He's not talking about the border fence. And I tell you, we separate those when I speak about it the same way as Donald Trump is. We talk about building the border fence. You have to plug the leaks in the boat before you can start fixing it and before you can start throwing the water out of the boat.

You have to secure the border, number one, because even if you deport people, especially the bad people, they are simply going to come back across. So, build the border fence first. Then we can talk about deportations. Right? That's what I think he's talking about.

It's going to be extremely difficult to deport millions of people that are not criminals. Right? We have to deport the criminals first, the gang members first. And, by the way, there's tens of thousands of them just in California's jail system.

KEILAR: But he was talking mass deportation. Is now -- is he changing on that?

HUNTER: Sure.

Can you literally do mass deportations? The answer is no.

KEILAR: People argue it's impossible. But he said he was going to do it.

HUNTER: The answer is no. But you can deport the worst people, the people that are criminals, the people that are here in our jails. You can deport them easily, because they're in our jails. You can deport people that get DUIs over and over, that do bad things to Americans.

You can deport them first, but you have to build the border fence first. Right? You have to build the Trump wall, as he calls it. Here in San Diego, we have the double border fence. He's not softening there.

But he's not softening there on building the border fence and on deporting the worst-of-the-worst people. But I think he understands that it's going to be more than a one-year process to make sure that you have to come -- that to be in this country, you have to be legal.

And I think for him to get stuff done, especially with the Senate, you're going to have Marco Rubio, you're going to have John McCain. You're going to have the people that are softer on immigration in the Senate that he's going to have to work with to do immigration reform. That's different...

(CROSSTALK)

KEILAR: You're saying that he's looking at people who maybe are not going to be as far to the right on immigration. And so he is acknowledging some sort of reality? Is that what we're -- I'm trying to pin you down, because they have not been specific about this.

HUNTER: Sure. Sure. Yes.

(CROSSTALK)

HUNTER: I don't know what he's thinking here.

KEILAR: OK.

HUNTER: I don't know what he's thinking here.

But I would say, yes, he's going to have to face the reality. There's probably a few hundred thousand, if not in the millions, criminals that are illegal aliens from all different countries throughout the world in the United States. Deport them first. Secure the border, so that people cannot come here illegally.

Then we can sift through the people that are here illegally and try to fast-track those people who have been in line legally who want to become American citizens who share our values and share our culture.

(CROSSTALK)

[18:20:00]

KEILAR: We're clear on what you're saying there.

But how is that not a softening of mass deportations? By definition, isn't saying, hey, we're going after the bad guys and then we're dealing with other people who are undocumented, that, by definition, is a softening.

HUNTER: No, because in order for him to do mass deportations, you are going to have to have what we call in Congress immigration reform, like comprehensive immigration reform.

In order for him to do that, he's going to have to work with the agricultural industry, the construction industry, all types of different industries to see who do we need in this country and even the high-tech injury, frankly, when you're talking about more high- skilled people that are here illegally on visas?

Those are one of the types of people that I think he is going to hold firm on are people that have overstayed their visas, like the people who bombed us on 9/11, right? You can go after those folks, but you have to have primaries, because this is going to have to go through Congress.

It is going to have to go through the House and Senate. And he should prioritize what is the most important thing that he can do when it comes to making sure that we put America first and we build the border fence and make sure that the bad people that are here leave first.

And I think, as president, you have to prioritize, because if you try to do everything, you will end up doing nothing.

KEILAR: Yes. All right, Congressman Hunter, stick with me. We have a lot more to talk about, including some new poll numbers that we're getting that show a pretty interesting pretty.

I need to get a break in, and then we will be right back.

(COMMERCIAL BREAK)

[18:25:40]

KEILAR: And we're back now with a Donald Trump supporter, Congressman Duncan Hunter, as Donald Trump is getting ready here to speak in Mississippi tonight. We're waiting that.

Congressman , I want to talk to you about something that Donald Trump has been making a bit of an agenda item for himself. And that's reaching out to African-American voters. He has a rally shortly in Jackson, Mississippi. He's going to meet tomorrow with African- American and Hispanic fellows at the RNC's Leadership Initiative.

But he had this message the other day that struck a lot of people as somewhat harsh. He said, what the hell do you have to lose? He was speaking to black voters.

Is that the best way to court African-American support?

HUNTER: I don't know. I don't know what his mind-set is when he says things like that.

(CROSSTALK)

KEILAR: Well, then would you say that? If you were trying to court black voters, is that what you would say?

HUNTER: Yes, if you're traveling throughout the entire nation right now and you see what's happening in Ferguson, a lot of these -- in Baltimore, in D.C. even, with all the problems, with the inner cities kind of busting at the seams, with the war on police that we have right now from the African-American community in these cities, those are all Democrat cities.

I mean, just about every single one of these cities with the high murder rates, from Chicago, Detroit, Los Angeles, these are all Democrat-run cities. So, he's saying, hey, what do you have to lose? How can it be worse than what you have right now, which is a busting at the seams and a veritable war against police in a lot of these places?

So, I mean, that's how he says it. I probably wouldn't articulate it like that, but not very many would. But that's kind of what I see him saying, is just being very honest, saying, hey, how has the Democrat machine, how has Hillary Clinton and how has the first black president of the United States, how have they helped you?

Because what he is talking about is, hey, we believe in less governments, less handouts. You might get less from us, but you will have more opportunity. That's what the Republican agenda stands for. So, I think that's what he's saying. That's how I took it.

KEILAR: Why is he going only to white areas? Or, recently, he has. He's in Jackson, Mississippi. But we have seen him. Has he really launched this effort to try -- or what he's described as an effort, his campaign described as an effort to talk to African-American voters. He goes to places that are more than 90 percent, some almost, almost completely white.

Why is he doing that?

HUNTER: Yes, I don't think he needs to explain why he's not going to a black enough place to speak about the African-American community. I think that's kind of a press thing.

If you look where I speak at, I probably haven't spoken to a predominantly African-American community before either. I don't think that that means anything great. I simply mean -- think that he hasn't done it, right?

(CROSSTALK)

HUNTER: I don't think that's as big of a deal as the media is making that. He's speaking where he's speaking at. I don't think it really matters whether he's in the inner city or not.

KEILAR: You're in San Diego. I'm assuming in San Diego, where you have a large Hispanic American population, you have gone places where you're not talking -- you're not in, for instance, a community that is 91 or 97 percent white if you're talking about those issues.

HUNTER: Sure. That's probably true.

But I'm a Republican. I don't see gender. I don't see race. I speak to whoever is there. So -- and Trump is probably the same way. I don't think he treats one place differently than another place. And I don't think his speeches, unlike Hillary Clinton's, will change depending on what the color of people are that he's speaking to.

I think he has the same message whether you're black, white, brown or whatever. His message is the same. And it's one of more opportunity, not more of the same.

KEILAR: OK, but he's polling at, like, 1, 2 percent with African- American voters. He's not resonating. So, doesn't he need to do something to make that connection that he's not making?

HUNTER: Yes, you know, I don't how he makes a connection like that.

I have never ran for president. I don't have any predominantly African-American communities in my district. So, I don't know how he does that. I mean, sure, he could go into the inner city and speak. He would probably be speaking to about five people. I'm not sure how that makes a connection. It's probably easier for him and it probably reaches more people if he speaks to more people where he's more supported, but speaks about these issues, which is what he's doing.

But I don't know how you reach out to these communities, except for saying, hey, we're going to try to make things better by giving you more opportunity, as opposed to what's been happening now, where you have the massive breakup of the families.

[18:30:04] I mean, you have -- you have seen this, Brianna. The inner cities in this country right now are busting at the seams. And you have been reporting on it all the time. So, how does -- how does Trump get around that?

It's either me and a different way or more of the same with Hillary Clinton. You know, I don't think where he says that at matters so much as what he is saying.

KEILAR: I want to draw your attention to some polls that we have out today, some CNN/ORC polls. We took a look at Arizona. We took a look at North Carolina.

So, what we're seeing in Arizona is that Donald Trump is up about five points when you're looking at a four-way race. Gary Johnson doing pretty well there at 12 percent, considering. You look at North Carolina, Hillary Clinton is up one point.

That's a pretty important state for Donald Trump to win. She's clearly making a play for that and seems to be doing well. So, let me ask you this and I've asked this of other Donald Trump supporters. I say, why is he in Mississippi? Why is he in these places that decisive in November?

A lot of people come back and they say, hey, he's taking his message everywhere. But does he really have that luxury when he's down in the polls?

HUNTER: So, number one, you'll probably never have me on the show again asking about polls. I give the polls no substance. I don't believe a word of it, because if you look at the likely voters and the people who voted for Trump, they're not considered likely voters. Therefore, they're not included this any of these polls.

And I remember, you know, four years ago, all the polls said Mitt Romney was going to win and we saw how that turned out.

KEILAR: To be clear, Republican polls. Republican polls said that Mitt Romney was going to be doing better.

HUNTER: OK.

KEILAR: I mean, that's what happened. It was the Republican internals and the Democratic internals had should be. I remember talking to convinced Republicans that did not mesh with what we were seeing publicly.

OK, we'll leave it there.

HUNTER: Number two, the answer is, on where he's speaking, I don't care where he speaks at. I don't see my big move behind where he speaks. I'm sure everything that we think it's supposed to be strategized out and everybody is working on it. Where do we go next and where is the most important. I don't Donald Trump works like that frankly. I think he speaks where he plans to speak at, whether it's an important place electorally or not, I think he goes where he wants to go. If he wants to go to Mississippi, by God, he's going to speak in Mississippi.

KEILAR: We will see, Congressman Duncan Hunter, if that works out. Thank you so much for giving us your time. We do appreciate it.

HUNTER: Thank you.

KEILAR: Just ahead, Hillary Clinton is holding private big money fundraisers. Should she be responding to him personally and publicly instead?

And a new missile launch by North Korea drives up concerns that Kim Jung-un's weapon response is getting more advanced and more dangerous to the U.S. and its allies.

(COMMERCIAL BREAK)

[18:37:35] KEILAR: We're following breaking news in the presidential race. New CNN polls show that Donald Trump and Hillary Clinton are essentially tied in the battleground state of North Carolina, and Trump has a five-point edge in Arizona. That's a state that traditionally leans Republican.

Let's talk about this race now as CNN Washington correspondent Jeff Zeleny, "Washington Post" assistant editor David Swerdlick, CNN chief political analyst, Gloria Borger, and CNN senior political analyst, Ron Brownstein, he is senior editor at "The Atlantic".

Gloria, we see Hillary Clinton. She hasn't been out since this attack has really ballooned up on the Clinton foundation. So much scrutiny she's been under. Is the campaign doing what they should right now?

Gloria, we see Hillary Clinton. She hasn't really been out since this attack has really ballooned up on the Clinton Foundation, so much scrutiny that she's under, she's been doing this private fundraisers. Is the campaign doing what they should right now?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: You know, it's kind of surprising to me that they haven't had a strategy kind of well in place to sort of deal with the Clinton Foundation, which, of course, they had to know were going to come up during this campaign. And their strategy right now at least is clear, which is you have the surrogates coming out. You have the campaign spokespeople coming out very strongly, particularly against the "AP" story. You know, you go on the offensive about it and you attack about it.

But they haven't had their candidate out there and I think that could turn into a real problem for them because she's got to answer questions directly about this, largely because the worst thing I think can happen to you in a campaign is when you have events that confirm an already existing narrative and the already existing narrative that was out there and being pushed quite successfully, I would argue, by the Trump campaign in the last week or so is that the Clintons are careless about these conflict of interest issues.

This is something that Hillary Clinton has to, herself, debunk personally and she can start counter attacking on that with Donald Trump who contributed to the Clinton foundation. And she can also make the argument that the Clinton Foundation does a lot of good work, and that what she was meeting with individuals she would have met with any way. So, she needs to start pushing that herself, not just with her surrogates.

KEILAR: And what I guess her biggest surrogate, Bill Clinton, has just weighed in on this.

[18:40:04] Let's listen.

(BEGIN VIDEO CLIP)

WILLIAM JEFFERSON CLINTON, FORMER PRESIDENT: We're trying to do good things. If there's something wrong with creating jobs and saving lives, I don't know what it is. The people who gave the money knew exactly what they were doing. I have nothing to say about it. I'm really proud. I'm proud of what they've done.

(END VIDEO CLIP)

KEILAR: So, we're hearing this, Jeff. You hearing these from Bill Clinton, the foundation does good work. OK, yes, the foundation does do good work. We know that. There's millions of people who are getting HIV/AIDS medication at a very discounted price, otherwise that wouldn't be receiving this across the world. No one disputes that.

But there's other issues here, and that good work isn't really the point.

JEFFREY ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Right, and that is what creates this conflict and this appearance of a conflict. He actually went onto say, just a short time ago at this stop in Atlanta, he said, look, but we do need to put more safeguards in place if she's elected. And he said the reason is, if you make a mistake, you have no one to appeal to.

I thought was interesting because when you're secretary of state, they could appeal to the White House. Of course, we know the Obama White House was so concerned about this back in January of '09, and now it turns out they had reason to be. So, I still think anything that he said does not clear this up. Gloria is right, she will have to address this.

And so many Democrats are shaking their heads tonight wondering why didn't they dispatch with this long ago? They knew his was an appearance of a conflict and Bill and Hillary Clinton just don't either recognize it or don't want to say, you know, that this thing that they set up that does good work, yes, has some issues.

KEILAR: Do you think, David, by not handling this as cleanly as they could have while she was secretary of state that they basically shot themselves in the foot for being able to have this really do work all while she's president?

DAVID SWERDLICK, THE WASHINGTON POST: Yes. I mean, they've opened the door to all this criticism and they opened it even wider by sort of trying to work the reps, kind of along the lines of what Jeff was saying. You know, whether they make the argument that the foundation does good work or complaining about the "A.P.'s" reporting on this instead of just coming before the American people and saying this is how we want to address the problem. It's working the refs.

It's a problem that the Trump campaign has as well. They work the campaign when it comes to something like voter fraud. You know, at this point in the race, voters want to see candidates talk to them about the issue, not complain about the coverage.

KEILAR: Ron Brownstein, I know you have something to say here. But I have to get in a quick break. We'll have first word out of the break. We have much more to talk about in politics. We'll be back in a moment.

(COMMERCIAL BREAK)

[18:47:18] KEILAR: And we're back now with our political team.

As Donald Trump and his allies escalate their attacks on Hillary Clinton in the Clinton Foundation, I wonder, Ron Brownstein, what you think about this because it seems like so often, it's been Donald Trump stealing what could be bad headlines for Hillary Clinton by saying something on Twitter, or saying something at a rally. And what we're seeing now is that it's Hillary Clinton who's really getting this negative focus.

Has she done herself a disservice by not shutting this down?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Well, I think, look, I think Donald Trump has shown more discipline and more focus in the last several days. I mean, he's not been lighting himself on fire with new controversies every day and he's allowed the focus to shift back to her, and this kind of endless series of ethical questions.

And, you know, look, I mean, as everyone has said, the Clinton Foundation does a lot of good work. But if you think about it, in the broad scheme of things, on the causes the Clintons care about, nothing can do as much good work as a victory in the presidential race and a successful presidency for Hillary Clinton. And if she is elected, she's a president who will be coming in with a substantial portion of the country doubting her honesty and integrity.

And that's why I doubt that the answer they had put forward to this point is the end point of the discussion of what's going to happen to the Clinton Foundation, if she wins and maybe even before November, because just the inherent difficulty of truly establishing bright lines between an institution that, you know, is in the name of the sitting president, founded by the spouse of the sitting president and the agenda of that sitting president is just very, very difficult.

And I've got to guess that the Clinton team will be reconsidering this as they go and if they win, reconsidering it a lot.

KEILAR: Donald Trump, Jeff, was given this opportunity by Sean Hannity. He almost teed up Clinton Foundation and said take a whack and Donald Trump didn't. And then you had his new campaign manager Kellyanne Conway asked about this, because we know -- we know, according to disclosures in the foundation that Donald Trump donated between a hundred grand and 250 grand.

Here is what she said about that.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, CNN ANCHOR: Well, he gave money. I mean --

KELLYANNE CONWAY, TRUMP CAMPAIGN MANAGER: As he says -- sure, because they do good work and let's hope that that money went to good use.

COOPER: So, he wasn't paying to play?

CONWAY: No, he was not paying to play.

(END VIDEO CLIP)

KEILAR: Are they undercutting their own argument?

ZELENY: Sort of. I mean, the really is a lot of Donald Trump supporters may never know he gave money to them. He used to be a Democrat. So, I'm not sure that any of them necessarily minded. But he's undercutting it somewhat, but he's, of course, arguing louder that the calls for a special investigation, whatever.

I'm surprised the Clinton campaign or super PAC has not reminded some voters about his donation. I expect that to be coming in the days ahead.

KEILAR: You think that will be coming, David.

SWERDLICK: I wouldn't be surprised to see it coming. And I do think he's undercutting his own argument. Back in the Republican primary debates, Trump positioned himself as someone who's -- look, I'm a businessman, I had to get along with everybody.

[18:50:05] It's not wearing as well now that we're in the thick of this issue.

KEILAR: OK. So, he is hosting a roundtable. This is his new thing. It's outreach to African-American voters, Hispanic voters, David, and he's hosting this roundtable tomorrow with black voters, Spanish GOP activists. What is he hoping to get out of this?

SWERDLICK: I think he's hoping to get out of this, a sense among voters, not just black voters, but all voters especially in swing states that he is friendly toward minority communities, friendly toward minority voters, that he's making an effort to reach these voters.

The problem is, is that meeting with Republican interns or activists in his conference room is just not the same as saying I will go speak to the NAACP. I will go speak to a black church. So, yes, it may help him on the margins, but this is not what he has to do to change his poll numbers with voters of colors.

KEILAR: Because, Jeff, he's going to places that are predominantly white when he delivers his message and, even though maybe -- maybe look, the NAACP is not going to be the normal audience for him, he's not going to get the reception that Hillary Clinton did. But she spoke to the VFW which isn't exactly her cup of tea. You know, they're not all about her, that might have been an opportunity, though, for him in a more controlled environment to make a pitch.

ZELENY: No doubt about it. And even if he would have gotten heckled or booed, that still could have helped him. But Donald Trump loves affirmation, that's why he does the big rallies across the country.

Tonight in Jackson, Mississippi, he is speaking to the choir essentially. He likes affirmation. He does not want any confrontation.

KEILAR: Yes. All right, Jeff -- I'm, unfortunately, going to have to leave it there, Gloria. I'm so sorry.

Gloria Borger, Ron Brownstein, David Swerdlick, Jeff Zeleny, thanks to all of you.

And just ahead, chilling new threats from North Korea. After his regime launches a ballistic missile from a submarine, Kim Jong-un warns that the U.S. mainland is now within striking distance.

(COMMERCIAL BREAK)

[18:56:13] KEILAR: We have breaking news out of North Korea.

Moments ago, Kim Jong-un boasting about a provocative new missile test. He says his country is bolstering its nuclear attack capability hour by hour.

And our Brian Todd has just been looking at this new statement.

What are you looking at, Brian?

BRIAN TODD, CNN CORRESPONDENT: Well, Brian, as you mentioned, just moments ago, Kim Jong-un declared this test successful, said this was brought on by the U.S. nuclear threat and U.S. blackmail and he said America is now within his striking range. North Korean media says Kim supervised the launch.

Tonight, officials from Washington to Seoul are calling this a very dangerous development. (BEGIN VIDEOTAPE)

TODD (voice-over): Tonight, the undersea threat to the U.S. and its allies from Kim Jong-un is greater than its ever been. South Korean and U.S. military officials say North Korea just test-fired a ballistic missile fired from a submarine that traveled about 300 miles, further than any missile Kim has ever fired from a sub. It landed in the Sea of Japan, inside Japan's zone for identifying threats from the air.

RICHARD FISHER, INTERNATIONAL ASSESSMENT & STRATEGY CENTER: This system is now an imminent threat. North Korea could soon integrate a nuclear warhead on to this ballistic missile.

TODD: This new satellite photo from the group 38 North shows the submarine at a dock with a crane over it just 48 hours before the test. Japan calls this launch reckless. U.S. officials call it provocative.

Analysts say tonight North Korea is now capable of striking anywhere inside South Korea with a ballistic missile fired from a sub. Some 25,000 U.S. troops are also based on the peninsula, but the threat doesn't end there. Experts believe Kim's regime is trying to build bigger, quieter submarines that could travel further and go undetected.

FISHER: They could potentially within the next decade develop submarines capable of transiting the Pacific Ocean within range sufficient to launch missile strikes against the United States.

TODD: It was a few months ago that one of Kim's submarine launched missile tests was thought by experts to have been staged with missiles fired from an underwater barge, not a submarine, accompanied by pictures believed to have been doctored. Tonight, experts say Kim is just a couple of years away from having a fully operational sub launched missile program.

(on camera): When he gets that capability. How does that change his behavior and his calculation from the United States?

BRUCE KLINGNER, THE HERITAGE FOUNDATION: They feel more emboldened in conducting not only provocations but actual attacks, perhaps tactical level against South Korea, feeling that they have (AUDIO GAP) kind of U.S. response.

TODD: The sub missile (AUDIO GAP) comes as troops conduct exercises with their South Korean allies. Analysts say Kim's always believed these drills are practice for taking him out and targeting his nuclear program. He's responded by being brazenly aggressive.

KLINGNER: With Kim Jong-un, we don't know as much about him as his father. We are uncertain if he understands the concept of red lines.

(END VIDEOTAPE)

TODD: Now, how could the U.S. and its allies counter the new submarine missile threat from Kim Jong-un? One military general tells us that the allies are going to have to put more spy planes in the air, more ships and underwater sensors throughout the Pacific Ocean to try to detect and intercept those subs. It's going to be could be difficult, expensive and could provoke China and Russia into being more aggressive in the Pacific -- Brianna.

KEILAR: Brian, we are a better understanding of how much more aggressive he has been than his father, right?

TODD: Well, that's right. The Center for Strategic and International Studies has countered up all these missile tests, all the kinetic hits, and found that Kim averages about nine tests a year of major weapons systems, of nuclear bombs, ballistic missiles like this one and the like. His father, Kim Jong-Il, well, he averaged fewer than three of those tests a year. This young is much more aggressive.

KEILAR: Very interesting. Brian Todd, thank you so much for that report. I'm Brianna Keilar. Thank you so much for watching.